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Government-reinforced Solyndra files for bankruptcy

 

Government-reinforced Solyndra files for bankruptcy

Solyndra is a California-based solar panel producer. Solyndra, LLC acquired over $1 billion in investment. $535 million of that expense came in the form of a federally-guaranteed loan. This week, the business declared that they would be declaring bankruptcy. Source of article: Government-supported Solyndra declares bankruptcy

Where Solyndra was supposedly going

In order to allow Solyndra to grow and expand, the government guaranteed a $535 million loan last year for the company. Obama was not the only one to visit Solyndra. In fact, the California Governor visited along with some solar-technology VIPs. Building roofs and poor areas could afford solar power with Solyndra’s plan. It wanted to produce thin solar films for this reason. The original plan with the cash was to hire a lot of new employees. The company also wanted to build a brand new plant for manufacturing.

Solyndra shuts down when confronted with opposition

In January 2011, Solyndra announced plans to delay the opening of a new plant and the hiring of brand new workers. To be able to stop collection on over $1 billion of investors’ funds, Solyndra declared it would lay off 1,100 workers and would file bankruptcy, as of Wed, August 31. In the last few months, Solyndra is really the third solar-power plant to file for bankruptcy in the U.S. Over the last year, Chinese manufacturing plants have started developing solar panels and have dropped the price of panels by more than 40 percent; several U.S. firms simply could not keep up

Many wonder what will occur with the guarantee

There were many federal loan guarantee questions before bankruptcy was even an issue for Solyndra. In Could, the Energy Department disclosed that the loan package had to be restructured. Before there were any full financial, legal or even marketing reviews done of Solyndra, the conditional commitment was signed by the government.

Solyndra’s responsibility in repaying loans

Over $1 billion in debt needs to be paid by Solyndra. The government may have to pay some of it. The loan guarantee was not for $1 billion. It was for $535 million. It won't be until after Solyndra's bankruptcy hearings, at which the government will be represented, that the exact responsibility of the government will be understood. What is known for sure is that this guarantee will put taxpayers on the hook for several million dollars.

Information from

Forbes: http://www.forbes.com/sites/toddwoody/2011/08/31/what-solyndras-bankruptcy-means-for-silicon-valley-solar-startups/

iWatchNews: http://www.iwatchnews.org/2011/08/31/6064/obama-backed-solar-firm-collapses-after-big-federal-loan-guarantee

MSNBC: http://www.msnbc.msn.com/id/44344494#.Tl6c0GOP-_0


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